The shorter borrows the stock to immediately sell (typically at the “buying” price of the spread). This creates immediate down pressure on the price, which is m

The shorter borrows the stock to immediately sell (typically at the “buying” price of the spread). This creates immediate down pressure on the price, which is meant to be balanced by eventual up pressure when they have to buy shares to cover. If you add up the effect on the price lending all retail stocks has on the market, it won’t be insignificant. Looking at it the other way, if you can generate “less risk” income off it, you have to be aware that the people borrowing the stocks are earning more than they are parting with. There is no free lunch on the stock market.